Arab states react to free trade proposal

SLOW GOING Throughout the world, analysts are wondering if the latest initiative is hyperbole, or part of a greater strategy aimed at stabilizing the Middle East

AFP , CAIRO

A Palestinian boy holding a bicycle rides a donkey near Hebron. US President George W. Bush declared that his free trade agreement would help the Middle East on its slow journey to modernity and proserity, although many nations are sceptical that the region can be propelled forward with either sticks or carrots.

PHOTO: AP

Arab states gave mixed reviews to US President George W. Bush's offer of a regional free-trade zone for the Middle East, with some dismissing it as a public relations exercise.

The success of the plan, announced Friday as US Secretary of State Colin Powell headed for Israel on a peace mission, hinges on whether the White House can broker a fair settlement to the Israeli-Palestinian conflict and establish a democratic regime in post-Saddam Hussein Iraq.

Fahd Fanek, a senior Jordanian economic analyst and editorialist, told reporters: "I think the importance of the American offer is political, with more of a public relations than an economic impact ... If the Americans want to improve their image in the Arab world they must be fair concerning the Palestinian question rather than [proposing] this project."

Fanek dismissed the plan as purely cosmetic.

Though it calls for creating a US-Middle East free trade area over the next 10 years, according to Fanek Arabs feel they need to see a real US effort to force Israeli cooperation with the internationally-drafted roadmap for peace, which calls for the creation of a Palestinian state by 2005.

In that context, Fanek described the plan as "trying to please the Arab world, to offset anti-American feelings resulting from first, siding with the Israelis and second, occupying Iraq."

On a practical level, Fanek pointed out that Jordan already has a free trade agreement with the US, while the oil-rich Gulf states enjoy lucrative trade relations with countries around the world.

And while Syria and Egypt would be potential beneficiaries of a free trade zone, Fanek cautioned: "Some Arab countries are not ready for that [zone] because their economies are protected by customs and their industry cannot survive in an environment of competition."

For its part, Egypt sidestepped talk of Bush's free-trade plan and concentrated on the portion of the president's speech where he vowed to work for the establishment of a Palestinian state.

"If the Palestinian people take concrete steps to crack down on terror, continue on a path of peace, reform and democracy, they and all the world will see the flag of Palestine raised over a free and independent nation," Bush told his audience at the University of South Carolina.

While Egyptian Foreign Minister Ahmed Maher told reporters US interest in the region is "in itself positive," he reserved praise for Bush's words on a Palestinian state.

Washington's "will to work for a settlement of the Palestinian problem, which is the main problem in the region, is something Egypt welcomes," Maher said.

He lauded a Palestinian commitment to the internationally drafted and US backed roadmap, while accusing "Israelis of continuing to dodge the issue."

"It is for this reason that we hope to see this American guarantee translate into positive positions and concrete measures adopted by Israel."

Palestinian officials also welcomed Bush's speech but glossed over his trade proposal.

"We in the Palestinian Authority welcome President Bush's speech but we hope the United States will put pressure on Israel to immediately implement the roadmap without any delays and without putting any conditions on it," senior Palestinian aide Nabil Abu Rudeina said.

The White House said it saw the free-trade zone being implemented in phases, as the Bush administration worked in tandem with individual countries to develop sound business regulations.